Jimmy John's leaving Illinois?

CHAMPAIGN — Neither Jimmy John Liautaud nor the president of the Jimmy John's sandwich chain would comment Thursday on a report the company will move its licensing division out of state.

Crain's Chicago Business reported that Liautaud said he would move the licensing division to Florida and probably move other parts of the company from Champaign in the next four years, perhaps to Texas or Indiana.

According to Crain's, Liautaud made the comments as a panelist during a conference on how tax policies affect corporate growth.

James North, the president of Jimmy John's Gourmet Sandwich Shops, also served on the panel Sept. 18 in Chicago.

Messages for Liautaud, the chain's founder, and North were left Thursday at the company.

Mary Trader, a public relations representative who works with the chain, said the company had no comment, and Liautaud and North were "unavailable."

Liautaud told The News-Gazette in January 2011 that he was angry about tax increases that Illinois had enacted and might recommend moving his corporate headquarters out of state.

He also said he had applied for Florida residency and planned to commute to Champaign.

During the 2011 interview, Liautaud said Jimmy John's employed 100 at its corporate office on Fox Drive and had 190 other employees who came to Champaign every four weeks.

In the wake of those comments, state Sen. Michael Frerichs, D-Champaign, met with Liautaud to hear his concerns.

The Champaign County Economic Development Corp. also requested a meeting with Liautaud in hopes of persuading him to stay.

According to Crain's, Liautaud said he considered leaving the state after Illinois raised the corporate tax rate from 3 percent to 5 percent. He felt even more strongly about moving when he saw how the state was spending money.

Mike Kirchhoff, the new chief executive officer of the Champaign County Economic Development Corp., said he recently exchanged emails with Liautaud in hopes of arranging a meeting.

Kirchhoff said Liautaud mentioned the tax situation in Illinois, but did not mention any moves in the email exchange.

Kirchhoff said when he was a student at Eastern Illinois University in Charleston years ago, his apartment was just across the parking lot from Jimmy John's first store.

"I bought from Jimmy across the counter," he said.

Later, when Jimmy John's opened in the Kansas City, Mo., area, where Kirchhoff previously worked, "I was first in line to buy a sub."

Kirchhoff said Jimmy John's has had remarkable growth and success in marketing quality products.

"I'm anxious to talk with him to see if we can add value (to the business)," he said. "He's got a lot of supporters here in central Illinois."

Kirchhoff added that Liautaud's concerns seem to be more state-oriented than local.

"Clearly, this is a state-level issue," he said. "It's more of a challenge trying to change state policy."

Laura Frerichs, chair of the economic development group and the wife of Sen. Frerichs, said she toured Jimmy John's headquarters with North on Tuesday and said the chain has grown to nearly 1,500 stores.

"For each new store they open, they send trainees and owners to Champaign to learn about running an operation," she stated in an email. "This activity alone contributes to nearly 600 hotel rooms a week."

She said the EDC, elected officials and local franchise owners have all offered support and assistance to help retain the chain.

Champaign City Council member Tom Bruno called Jimmy John's "an extremely valuable local employer, and we highly value its presence in the community."

"They are not unnoticed, and we're not ungrateful that they're here," he said.

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Who wrote this uncredited story for the News-Gazette? Someone outsourced from another country? Because anyone who lives in Champaign-Urbana should well remember Mr. Jimmy John making this same threat years ago. It seems to be his "Chicken Little" routine. Every time we get near an election day, he makes the threat, trying to drum-up votes for his right-wing candidates. Now see the context of him wanting to move to Florida, so his business can pay less tax. He strives to join the 47%. How nice. But I bet he will still enjoy Medicare and Social Security benefits when he retires. Typical.

Taxes actually do good in our communities. That JJ doesn't want to support his local economy by paying a fair share is a shame. Mind you, he is not threatening to take his sandwich shops out of state--they'll still be here, paying minimum wage to our younger generations, and sopping up cash profits from our economy--he just threatens to take his business offices and tax money away.

But he won't. He never does. He just blows smoke and wind trying to scare folks into voting for his conservative party line.

It's a shame that the News-Gazette didn't put this story in perspective. Not doing so makes the N-G apper as a tool of the right-wing.

Anyone who thinks that what Jimmy will eventually receive from Social Security and Medicare is remotely relevant to the issue of state taxation of his business income is clueless about taxes and shouldn't be commenting.

He wants to move to a state that has zero income tax. The 47% you are referring to is FEDERAL INCOME TAX. Last I checked Florida is running there state a hell of a lot better than Illinois, without a confiscatory 5% tax rate. Personally, I find it astounding that anyone chooses to live in this state, especially when you consider the 5% is a flat tax. The elderly and poor are paying the same rate as JJ??? Are you kidding me!

It's a business, taxes are a cost of doing business. If he can reduce his costs by moving to a more business friendly state he should. Spending less on taxes will give more money for expanding his business, creating more jobs and more taxable income.

I don't care if he stays or goes, but he'd be stupid to stay in Illinois when there are so many more business friendly states. Illinois pretty much sucks these days, between the politicians, freeloaders and idiots. Look at all the politicians trying to kiss his backside at the same time they reach into his wallet.

Jimmy John's is great for Champaign-Urbana, but I propose that Jimmy John's has really created zero jobs in America. The rise of Jimmy John's has coincided with a loss or shift of food service jobs or spending from elsewhere.

People are substituting Jimmy Johns for KFC, Quiznos, Arbys, or other food joints. According to QSR Magazine, these 3 shrinking fast food chains closed almost 700 stores last year in the USA, while Jimmy John’s opened 199 stores. (reference: http://www.qsrmagazine.com/reports/qsr50-2012-top-50-chart)

Where in the statement you responded to was there anything at all about subsidies or maintaining inferior enterprises? Seems to me Brad was simply pointing out that the so-called "new" jobs created by JJs are being filled by the same people who used to work at other establishments that are now closed.

Do you not understand that economies can expand? Our nations economy is not a zero sum game, jobs can be added without others being destroyed. The fact that new Jimmy John's stores are opening every week means jobs are indeed being created.

therildil, you are helping me make my case. How much has the economy grown in the last 10 years? You notice that Jimmy Johns does not adjust on their sign to account for "net" jobs created in 2011, but I can assure you that the net jobs created is significantly lower than 7066.

Jimmy Johns is a mostly domestic company that is just a medium-sized player in a very crowded market. Have you ever heard a politican get excited about a fast food restaurant opening in a town of 100+K inhabitants? Me either because fast food is a very dynamic market where stores come and go after the novelty wears off. Do you remember Dog N Suds? Big Boy? Red Wheel?

When I was 18 years old, I worked at the Charley Horse restaurant in Urbana. Over the years, that location has been several different restaurants. Are each of the restaurants owners that move into the building "Job Creators"?

Sub sandwich shops are employment kabuki theatre. I am proud to work for an American company that produces goods not only for sale in the US, but also overseas. What America needs is companies that produce something that can be exported or displace the exports of a global competitor in the US market. Otherwise, we are doomed to be the sub sandwich capital of the world.

You might remember reading that Mike Frerich's cousin moved his trucking business to Covington, IN and saved 51% on his employment costs (unemployment, workers comp). If Frerichs can save $100,000 in employment costs with his small trucking company, imagine what employers like Jimmy Johns and Caterpillar can save. Yes, there are rumblings that CAT is seriously thinking about moving its headquarters.

You can pretend this is a "chicken little routine" if you want, but employers are less likely to invest in our state when lawmakers continue ingore the excessively high employment costs in this state and refuse to implement meaningful workers comp and pension reforms.

Local community leaders are going to point to businesses opening and try to convince you that everything is great (that is their job), but IL's unemployment rate is now 9.1%, the worst among surrounding states. You'd think our unemployment stats would be going the other way since between 1995 and 2009, the state lost on a net basis more than 806,000 people to out-migration (and took with them $26B in taxable income). Less potential income-generating taxpayers and a high unemployment rate is a double whammy.

We can just pretend employers are just "blowing smoke". It is so much easier to believe this than dealing with reality. Even if he were blowing smoke, Illinois is shining example of policy failure and we shouldn't be waiting around for the most visible employers to state the obvious before finally addressing the problems we should have been dealing with a decade (or more) ago.

ericbussell, What happened when Illinois tried it your way and offered a big corporate welfare package to Sears, to keep its HQ in the state? They stayed, took the benefits, and still laid off thousands. Corporate welfare is not the right approach. And when you keep threatening to leave the way JJ does, and yet you stick around and are an integral player in state politics the way JJ's owner is, the only way to describe the action is exactly like Chicken Little. Scare tactics, nothing else.

That's right. Corporate welfare is capitalism in its purest form. If you can't understand that, you must be a socialist. And anyway, only socialistical liberal do corporate welfare -- everyone knows that. So we can actually blame all the bad parts about corporate welfare on the liberals.

Very neat and tidy. As a conservative I desire low taxes and equal treatment for all. It is ridiculous that the state income tax rate increases by 67%, but if you are a multi-billion dollar corporation you can earn a temporary reprieve. It is always temporary, in the end jobs and business's leave the state and people wonder why. There is a reason why socialism does not work and never will.

Meanwhile the minimum wage earner has an additional 2% taken from them.

Mr Jim Johnny is a REAL AMERICAN PATRIOT, not like those fake American socialistics who DON'T PAY TAXES. When MOOCHERS like those who vote DEMONRAT don't pay taxes, it's because they're lazy and dependent on the govermint cheese plantation.

However, converse-wise, when people like Mr Jim Johnny and his hero MITT ROMNEY have a zero or otherwise low tax rate, it's THE HIGHEST FORM OF PATRIOTISM. Why don't YOU PEOPLE understand this???22?

We should be grateful for what Jim Johnny is offering to do for us -- afterall, it's hard to inherit money from mommsy and daddums, then fail, then get more money from mom and dad, and then become a successful, self made man who doesn't owe you people a dime in taxes.

Oh, sure, the liberals always talk about taxes paying for roads and education and some modicum of health care for less than minimum wage JJ workers. To which I say: SHUT UP YOU DANG SOCIALISTICS!!!!!1!

So there.

So, as a proud Illinoisianite, I say good job Jim Johnny; leave the state that helped you build up your business. Relocate for a lower tax rate. GO GALT MAN!!!

Except do what Romney did: start splitting your time between Switzerland and the Cayman Islands -- it's what REAL PATRIOTIC AMEERICANS DO!!!!

You might be able to shoot fewer animals on those DANGEROUS AFRICAN SHOOTEM UP SAFARIS, but your money will be safe from the communistical nazis currently running our govermint.

Well, good riddance to another welfare queen. State and municipal taxpayers in Illinois have been taken to the cleaners by this guy. He hates welfare for middle income people, but he and his businesses have benefited greatly from tax subsidies, corporate welfare, and gifts from middle class people to his gold-lined pockets. Each of the jobs he brags about creating took $54,000 from Illinois taxpayers, not a bad subsidy for minimum wage jobs. Let the gullible Florida taxpayers subsidize him for a while.

Good riddance Jimmy, now quit threatening and be a man and go already we are tired of hearing you whine. Due to my dislike of crybaby Jimmy, his business practices and his political ideology I use that great free market principle of choosing not to give his business any of my money. So lets all give boo hoo Jimmy a big wave buh bye as he leaves our community. You will not be missed.

Any business person who up and leaves a state, any state over a 2% tax increase has other issues. It is not fair to his current employees to ask them to relocate or for him to leave them behind. The environment in Florida is worse than Illinois.

This is more about JJ being the bully he is. He has never been comfortable or accepted in C-U and for that and other reasons he is just throwing a temper tantrum like a spoiled child who isn't getting his way. This attitude is not new for him. HE hates supporting his community and his country.

Thousands of businessmen and women thrive in Illinois without all the whining. His true movites may be related to the relaxed bankruptcy laws in Florida. As a part time Florida resident I know his stores in Florida are not doing well and that could be an indication of his chain nationally. His brand is tarnished.

Patriotic Americans pay their taxes and respect their employees, regardless!

PS: Maybe he shot his wad on loser Mitt Romney and is bailing while he still has some dignity left.

"Senate and House lawmakers had voted to raise the personal income tax rate from 3 percent to 5 percent and the corporate tax rate from 4.8 percent to 7 percent. Both rates were adjusted to carry through until 2015, when they would drop to 3.25 percent and 5.25 percent, respectively."

The difference for individuals is 2% and the corporate rate is 2.2%. Using the 67% sounds much more alarming though, doesn't it? I don't think this tax raise is the problem, it's just the focus of people's anger. The whole tax system and how we are financing our state are the issue. As long as we get distracted by the single issues and let anger divide us they don't have to fix the problems.

7066 jobs in 2011. How many of those employees work under 40 hours per week so that JJ does not have to pay benefits? Too bad that JJ does not appreciate that the taxes he pays in IL help to provide road repair, fire protection, police protection, and an education for his employees.

You peasants should be licking the boots of generous, kind, noble, and brave heroes such as John Jimmy and Mitt Romney. You should be ashamed that you have the nerve not to appreciate all these kind and wondrous souls do for you people.

Hang your heads in shame, shame at you impudence and ingratitude. You may await our decision on whether or not to accept your apology as abject enough, or not.

Last I checked you are free to open your own restaurant or sandwich shop. If you hate Jimmy John's so much go for it, put him out of business. I am guessing you'd rather mooch off his success however via all the money he pays in taxes.

Your attitude is exactly what is wrong with a certain percentage of our population. Where did Romney's family get there wealth? Santa Claus? At some point, someone in his famiy's past took a risk and earned that wealth.

Every person in the United States in free to do what they please, which includes starting their own business. If you think you need hundreds of thousands of dollars to start a business you really are an idiot. I would mention specific examples of self-made millionares but I won't waste my time.

No, ya. You're right. We need to elect people like Jim John and his role model Romney to office. They'll bring back Bushenomics and soon everything will be back to the way it was just before Obama took office.

Good times!!!1!

NO TAXES. NO REGULATIONS. LET OUR BETTER BE FREE OF GOVERMINT TYRANNY!!!!!!!1!

So I take it you accept and are happy with an unemployment rate of greater than "8%"? (we all know the real rate is much higher)

I have plenty of issues with Bush too, but Obama is infinitely worse. JJ moving to Florida is a only one example of the negative impact policy can have on a community or state. You seem to think legislation can be passed or taxes raised without citizens taking actions to protect their interests. We do not live in a static envirnoment.

>> I have plenty of issues with Bush too, but Obama is infinitely worse.

This opinion confuses me. Just what has Obama actually done that is so bad? Obama has basically governed like four more years of Bush, except with significantly less support from Congress. Hell, maybe that's the primary reason why this has looked like Dubya's third term.

Obamacare? Conservative think tank plan. Literally. Romney freaking did it first and the Republicans loved it until Obama compromised for it. Then they flipped the script on him.

Gitmo? Still open. Whoops.

Tax breaks for the wealthy? Extended. I'm sure glad they got around to creating more jobs in that time.

Bonuses for failed CEOS? Sure! I can hear that money trickling down from here.

Bank Bailouts? Why the heck not?!

There are countless liberal, leftist, and yes, even socialist things that Obama had within his power to do and didn't do in the last three-plus years. He didn't even suggest nationalizing health care, or the banks, even though there are great arguments for either given the repeated and catastrophic failures of both industries to self-regulate.

Where is the socialist agenda? Where is the "infinitely worse than Bush," if you're a conservative? Am I living in a different country from you?

As usual, all these government employees flood the comment line with " WE love taxes" line of thought. Get out of your coccoon and get out into the hinterland of the state. Businesses leaving quickly, whilst FREICHRICHS, sneeks through a midnight tax hike only to spend on raises for state employees. I travel the state weekly visiting what little manufacturing is left here.....all are looking to leaving while Nero Quinn fiddles. Wisconsin has landed several new businesses, and Indiana is taking us to the cleaners.....Quit sending the same Democrats to the state legislature to bow to Madigan. One party rule is crushing this state. Smart move Jimmy....just on the Breaking News is CATS purchase of a huge land mass near ATHENS GEORGIA .....planning on moving 2, 000 to Georgia.

So if Caterpillar is getting dragged into the "leaving Illinois" argument again, then we should ask Caterpillar why they dropped tens of millions of dollars into the U of I while simultaneously laying off hundreds of employees. For the usual reasons, access to patent and intellectual property rights, first crack at the best engineers and a big see you later to the line workers to make up the difference in the cost.

JJ is the wisest business man for leaving the state, but Frerich's cousin is evil for it? The 47% avoiding taxes is destroying America, but JJ doing it is wise, wise leadership?

Leave behind the fact that the man inherited his money to invest, and used some odd business practices that helped him "cash up" during the early years. But let's consider the question of how many of his minimum wage, bullied employees would be able to deliver his sandwiches without public roads, or how many would be able to count his money without public education.

Yet he owes nothing to the state. I find it funny that it is the same people here cheering him on who also gripe about the state not having the money to balance its budget.

He is your hero for abandoning you, and flying off in his 1% lifestyle. I guarantee he has less respect for you being a minion than you have for him as a great leader and icon of business.

Do other states not have roads and schools? Not only do they have roads and education, I'll bet their state finances under better control.

If you are not willing to pay excessive taxes and fees, you hate education and infrastructure? Don't forget public safety. I'm sure Jimmy John hates and policeman and firefighters also.

Job providers in this state are going to make smart business decisions. Is it greed or basic common sense? If we can't offer investors an attractive and stable economic environment, we have nobody to blame but ourselves.

The recession is what it is, I am speaking of the woeful policiy actions taken initially by Bush and futhered to an extreme by Obama. The actions of our current President have porlonged and made this recession worse.

This situation is about Illinois compared to other states. Every state in the nation is having to deal with the same economic challenges. Some just do it (much) better than others. You can't blame Illinois' bad policy choices on anyone in Washington.

I actual fact, I was directly responding to the commenter's excellent point that the economy was doing just fine under Bush and agreeing with his desire to return to how things were 4 years ago as an integrated part of the national economy that was dosing great under the kind of Bushenomics Romney and JJ want us to return to.

As much as I would like to do so, we can't ascribe all the problems to the DemonRats when it's so patently obvious the Illinois GOP is just so much better at governance and economics that those Chicago mobster thug Dems, right?

JJ, only in your commercials can your employees deliver sandwiches by magic. I wonder how freaky fast they'd be if they didn't use publicly funded roads. Go on down to FL in search of your tax-free paradise, but you won't find it there. Keep looking -- you'll find a place where you don't have to pay taxes if you go far enough. You might have to put up with Somalian sea pirates, warlords, and Taliban strongholds, but you won't have to worry about any pesky IRS agent, that's for sure.

The picture on the sign with this story says "Jobs created in 2011-7066".

A quick clarification...those jobs are created by me and the rest of the paying customers and I'm sure Jimmy's tax burden is firmly built into each sandwich oh so carefully assembled by the minimum wage employees behind the counter.

The market dictates private sector job creations and if Jimmy wants to pull up stakes then those job statistics will appear on some other restaurant signage. He knows that and is just looking for a cheap inroad through the tax code which if he gets will certainly not prompt him to lower his prices accordingly.

When the University Child care workers first picketed about low wages next door to their Lincoln avenue location several years ago, they got in such a panic they called the police to report a disruptive crowd believing they were the object of the picket. Yeah, sincere concern for those 7066 employees wasn't it?

When you tell carlos that, you may want to say goodbye as well since his voluntary "Downside risk" may put him on the discard heap with all the others lamenting their risk gone wrong. He would however be replaced by another Carlos/Ted/Bob whoever and you will still get to stay drunk by giving the new guy your money.

Unless of course you had plans to let Carlos move into your place and will spend your beer money supporting him and paying off his defaulted business loans?

Interesting pros and cons about keeping businesses within the state, what it costs to do so, and what state actions stimulate plans for an owner of a business to consider leaving.

Part of this conversation has to do with people losing jobs, thus unemployment, and economic development. Often times when these have been topics, I have invoked the name and work of Greg Leroy. Just by happenstance, not something I was looking for, I came across this article that analyzes the cost to communities when incentives, such as TIF and Enterprise, are used as means for economic development.

Say all you want about Jimmy John and his company, but at the end of the discussion realize two major things:

1. The State of Illinois is as business unfriendly as it is possible to be, and it's not just taxes. It is work comp, and unemployment, and a state government that is essentially bankrupt and doesn't appear to be doing anything about it outside of raising taxes. There is no corresponding effort to engage in spending or political reform.

2. Jimmy is one of hundreds of small business owners who are thinking and doing exactly what he is. They are shopping their companies to neighboring states. They just aren't as vocal, or as some might say, bombastic, about their actions and opinions, but make no mistake, they are out there, and they are getting ready to leave just like Jimmy.

Okay, three things... No matter what anybody says, Jimmy's contributions to our community will be difficult to replace, and not just because his business brings in thousands of franchisees who stay in our hotels, eat at our restaurants, and buy our services each year. (All of which generate tax revenues for Champaign and Urbana.) Jimmy has been, and continues to be one of the area's most philanthropic individuals, and he genuinely enjoys and believes in giving. Believe me, I have seen it in action. There are very few in our community who can match his generosity year in and year out.

All of his expenses are built into the prices I pay and he is just as skilled at taking as he is at giving which I'm sure he remembers to write off on his taxes. It’s just a chain of sandwich shops that exists only because of its paying customers and the available dollars in play for dining out; it’s not Doctors Without Borders.<?xml:namespace prefix = o />

He would not be the first CEO to register his corporate home office in another state or even in another country for that matter to side step the tax codes and increase his net profits, so let’s not deify this guy as if he is funding Champaign Urban’s existence out of a personal ideology.

Orbiter says "But I bet he will still enjoy Medicare and Social Security benefits when he retires." Of course he will. He paid into it. He would be much better off if he had been able to pay into a 401K plan that would have assured him a return.

When it comes to local taxes and their use, I only need to point to the streets around there. Horrendous!!! The cities have instituted a gas tax. I have still seen no improvement. Anyone who comes here and is not locked in to buying gas in the twin cities is nuts to pay the prices here. I time my fuel purchases when I come to C-U to never have to spend any gas money there. So, instead of receiving additional income, over and above what you received before, you receive nothing. But you have lovely art.

1. Florida is an absolute mess as well. So the notion of higher income taxes being related to economic well-being is a smokescreen. As others have noted, the state collects exorbinant user fees -- the convention taxes on hotel rooms and rental cars in Orlando, for instance, are at least 13% of the rental price. Regardless of where the money comes from, roads still need to be built, and schools still need to be run. So JJ would be basically be trying to dump his share of the taxes on someone else, which makes him a welsher in my book.

I decided that since there was little evidence that the firm was moving, I would write on it and see if they still planned on moving. There was little evidence that the firm still planned on moving until that business roundable panel discusson on the 18th. I began writing a while ago.

Querying property records in Monroe County, Florida reveals that March of this year, Liautaud closed on a condo in Key Largo - in the same neighborhood that a firm with JJ’s corporate mailing address, Liautaud Development Group LLC, purchased a home in mid-2010. The home was demolished after purchase.

I called JJ's corporate office and talked with a PR rep. She warned me that a reply of "No comment." was likely. Sure enough, I got a call a couple of days later. "No comment."

It's hard to research and write when you're working full time and unpacking from a recent move...

Not to mention E. coli. I posted a couple of times reminding people of JJ history of problems with tainted/contaminated food, but the NG promptly pulls those posts. No need to google: under "more like this" the NG itself has documented how filthy his product has been at times.